STOCK PURCHASE AGREEMENT
Exhibit
10.1
This
Stock Purchase Agreement
(“Agreement”) is made and entered into as of this 18th day of
December, 2007, by and among In Veritas Medical Diagnostic, Inc., a Colorado
corporation having its principal offices at the Green House, Beechwood Business
Park North, Inverness, Scotland 1V2 3BL (the “Seller”), Medical Diagnostic
Innovations Ltd. a corporation organized under the laws of England and Wales
having its principal office at 3rd Floor,
00 Xxxxx
Xxxxxx Xxxxxx, Xxxxxx X0X 0XX, Xxxxxx Xxxxxxx (the “Purchaser”), IVMD (UK)
Limited, a corporation organized under the laws of England and Wales having
its
principal office at Unit 2, Taurus Business Park, Xxxxxx Xxxxxxxxx, Xxxxxxxxx,
Xxxxxxxxxx, XX0 0XX, Xxxxxx Xxxxxxx (“IVMD UK”) and Jopejo Limited, a
corporation organized under the laws of England and Wales having its principal
office at Unit 2, Taurus Business Park, Xxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxxxx,
XX0 0XX, Xxxxxx Xxxxxxx (“Jopejo” IVMD UK and Jopejo are sometimes collectively
referred to hereinafter as the “Subsidiaries”).
W
I T
N E S S E T H:
WHEREAS,
Seller owns 19,609 shares of common stock, par value £1.00 per share
and 221,091 shares of cumulative redeemable preferred stock, par value £1.00 per
share of IVMD UK (the “IVMD UK Shares”) and 83,353 shares of common stock, par
value £0.05 per share of Jopejo (the “Jopejo Shares” and collectively with the
IVMD UK Shares, the “Shares”), which Shares constitute 100% of the issued and
outstanding shares of capital stock of each of the Subsidiaries;
and
WHEREAS,
the Seller desires to sell to the Purchaser, and the Purchaser desires to
purchase from the Seller, the Shares for the purchase price and upon the terms
and conditions hereinafter set forth;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter contained, the parties hereby agree as
follows:
ARTICLE
I
SALE
AND
PURCHASE OF SHARES
1.1 Sale
and Purchase of Shares.
Upon
the
terms and subject to the conditions contained herein, on the Closing Date the
Seller shall sell, assign, transfer, convey and deliver to the Purchaser, and
the Purchaser shall purchase from the Seller, all of the
Shares.
1
ARTICLE
II
PURCHASE
PRICE AND PAYMENT
2.1 Amount
of Purchase Price. The purchase price (the “Purchase Price”) to be paid by
Purchaser for the Shares is Six Hundred and Sixty Five Thousand, Eight Hundred
and Seventy Two Dollars ($665,872), of which Twenty Six Thousand, Five Hundred
Dollars ($26,500) has been previously advanced by, or on behalf of the Purchaser
to defray certain costs incurred by the Seller in connection with the
preparation and filing of the Form 10-QSB for the quarter ended April 30,
2007
2.2 Payment
of Purchase Price.
On
the
Closing Date, the Purchaser shall pay balance of the Purchase Price to the
Seller, which shall be paid by the delivery to Seller of a certified or bank
cashier's check, payable to the order of the Seller or, at the Seller’s option,
by wire transfer of immediately available funds into accounts designated by
the
Seller.
ARTICLE
III
CLOSING
AND TERMINATION
3.1 Closing
Date.
Subject
to the satisfaction of the conditions set forth in Sections 7.1 and 7.2 hereof
(or the waiver thereof by the party entitled to waive that condition), the
closing of the sale and purchase of the Shares provided for in Section 1.1
hereof (the "Closing") shall take place at the offices of Sichenzia Xxxx
Xxxxxxxx Xxxxxxx LLP located at 00 Xxxxxxxx, 00xx Xxxxx,
Xxx Xxxx,
Xxx Xxxx 00000 (or at such other place as the parties may designate in writing)
on such date as the Seller and the Purchaser may designate. The date
on which the Closing shall be held is referred to in this Agreement as the
"Closing Date".
3.2 Termination
of Agreement.
This
Agreement may be terminated prior to the Closing as follows:
(a) At
the
election of the Seller or the Purchaser after March 15, 2007, if the Closing
shall not have occurred by the close of business on such date, provided that
the
terminating party is not in default of any of its obligations
hereunder;
(b) by
mutual
written consent of the Seller and the Purchaser; or
(c) by
the
Seller or the Purchaser if there shall be in effect a final nonappealable order
of a governmental body of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated hereby;
it being agreed that the parties hereto shall promptly appeal any adverse
determination which is not nonappealable (and pursue such appeal with reasonable
diligence).
2
3.3 Procedure
Upon Termination.
In
the
event of termination and abandonment by the Purchaser or the Seller, or both,
pursuant to Section 3.2 hereof, written notice thereof shall forthwith be given
to the other party or parties, and this Agreement shall terminate, and the
purchase of the Shares hereunder shall be abandoned, without further action
by
the Purchaser or the Seller.
3.4 Effect
of Termination.
In
the
event that this Agreement is validly terminated as provided herein, then each
of
the parties shall be relieved of their duties and obligations arising under
this
Agreement after the date of such termination and such termination shall be
without liability to the Purchaser, the Seller or each of the Subsidiaries;
provided, however, that the obligations of the parties set forth in Section
10.4
hereof shall survive any such termination and shall be enforceable hereunder;
provided, further, however, that nothing in this Section 3.4 shall relieve
the
Purchaser or the Seller of any liability for a breach of this
Agreement.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF THE SELLER AND THE SUBSIDIARIES
The
Seller and the Subsidiaries hereby
jointly and severally represent and warrant to the Purchaser that:
4.1. Organization
and Good Standing. The Seller and each of the Subsidiaries, are corporations
duly organized, validly existing and in good standing under the laws of the
jurisdiction of their incorporation. The Seller and each of the
Subsidiaries, are not required to be qualified to transact business in any
other
jurisdiction where the failure to do so would reasonably be expected to result
in (i) a material adverse effect on the legality, validity or enforceability
of
this Agreement, (ii) a material adverse effect on the results of operations,
assets, business or financial condition of the Seller and each of the
Subsidiaries, taken as a whole, or (iii) a material adverse effect on the
Seller’s and each of the Subsidiaries, ability to perform in any material
respect on a timely basis their obligations under this Agreement (any of (i),
(ii) or (iii), a “Material Adverse Effect”).
4.2. Authority.
(a) The
Seller and each of the Subsidiaries, have full power and authority (corporate
and otherwise) to carry on their business and have all permits and licenses
that
are necessary to the conduct of their business or to the ownership, lease or
operation of their properties and assets.
(b) The
execution of this Agreement and the delivery hereof to the Purchaser and the
sale contemplated herein have been, or will be prior to Closing, duly authorized
by the Board of Directors of the Seller and each of the Subsidiaries, having
full power and authority to authorize such actions.
(c) Subject
to any consents required under Section 4.5 below, the Seller and each of the
Subsidiaries have the full legal right, power and authority to execute, deliver
and carry out the terms and provisions of this Agreement; and this Agreement
has
been duly and validly executed and delivered on behalf of the Seller and each
of
the Subsidiaries and constitute a valid and binding obligation of the Seller
and
each of the Subsidiaries, enforceable in accordance with its terms, subject
to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
of
general application affecting enforcement of creditors' rights and subject
to
general principles of equity that restrict the availability of equitable
remedies.
3
(d) Neither
the execution and delivery of this Agreement, the consummation of the
transactions herein contemplated, nor compliance with the terms of this
Agreement will violate, conflict with, result in a breach of, or constitute
a
default under any statute, regulation, indenture, mortgage, loan agreement,
or
other agreement or instrument to which the Seller and each of the Subsidiaries
are parties or by which each or any of them is bound, any charter,
regulation, or bylaw provision of the Seller and each of the Subsidiaries or
any
decree, order, or rule of any court or governmental authority or arbitrator
that
is binding on the Seller or each of the Subsidiaries, in any way.
4.3. Shares.
(a) The
authorized capital stock of the Seller consists of 500,000,000 shares of common
stock, par value $0.001 per share and 50,000, 000 shares of preferred stock
of
which 86,048,474 shares of common stock and 34,343,662 shares of designated
as
Series A Preferred stock are issued and outstanding. Other than set forth in
the
SEC Reports, there are no authorized or outstanding subscriptions, options,
warrants, calls, contracts, demands, commitments, convertible securities or
other agreements or arrangements of any character or nature whatever under
which
the Seller is or may become obligated to issue, assign or transfer
any shares of capital stock of the Seller.
(b) The
authorized capital stock of IVMD UK consists of 19,609 shares of common stock,
par value £1.00 per share, of which 19,609 shares are outstanding.
The shares of IVMD UK are duly authorized, validly issued, fully paid and
non-assessable
(c) The
authorized capital stock of Jopejo Limited consists of 2,000,020 shares of
common stock, par value £0.05 per share, of which 83,353 shares are outstanding.
The shares of Jopejo are duly authorized, validly issued, fully paid and
non-assessable
(d) Upon
the delivery to Purchaser on the Closing Date of the certificates representing
the Shares, Purchaser will have good, legal, valid, marketable and indefeasible
title to the then issued and outstanding shares of capital stock of each of
the
Subsidiaries, free and clear of any liens, pledges, encumbrances, charges,
agreements, options, claims or other arrangements or restrictions of any
kind.
4.4. Consents.
Except for the approval of the shareholders of the Seller, no consents or
approvals of any public body or authority and no consents or waivers from other
parties to leases, licenses, franchises, permits, indentures, agreements or
other instruments are (i) required for the lawful consummation of the
transactions contemplated hereby, or (ii) necessary in order that the
Business can be conducted by the Purchaser in the same manner after the Closing
as heretofore conducted by the Seller or each of the Subsidiaries nor will
the
consummation of the transactions contemplated hereby result in creating,
accelerating or increasing any liability of the Seller or each of the
Subsidiaries.
4
4.5. SEC
Reports; Financial Statements. The Seller has filed all reports,
schedules, forms, statements and other documents required to be filed by the
Seller under the Securities Act and the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the two years preceding the date hereof
(or
such shorter period as the Seller was required by law or regulation to file
such
material) (the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred to herein as
the
“SEC Reports”) on a timely basis or has received a valid extension of
such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act, as applicable, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. Such financial statements comply in all material respects
with applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles applied on a
consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements or the notes thereto and except
that unaudited financial statements may not contain all footnotes required
by
GAAP, and fairly present in all material respects the financial position of
the
Seller and its consolidated Subsidiaries as of and for the dates thereof and
the
results of operations and cash flows for the periods then ended, subject, in
the
case of unaudited statements, to normal, immaterial, year-end audit
adjustments.
4.6. Books
and Records. The books and records of the Seller and each of the
Subsidiaries are complete and correct in all material respects and have been
maintained in accordance with sound business practices, including the
maintenance of an adequate system of internal controls. True and
complete copies of all available minute books and all stock record books of
each
of the Subsidiaries will be delivered to Purchaser at Closing.
4.7. Absence
of Undisclosed Liabilities. Except as and to the extent reflected
or reserved against the financial statements included in the most recent SEC
Report, there are no liabilities or obligations of the Seller and each of the
Subsidiaries of any kind whatsoever, whether accrued, fixed, absolute,
contingent, determined or determinable, and including without limitation
(i) liabilities to former, retired or active employees of the Seller or
each of the Subsidiaries under any pension, health and welfare benefit plan,
vacation plan or other plan of the Seller or each of the Subsidiaries,
(ii) tax liabilities incurred in respect of or measured by income for any
period prior to the close of business on the, or arising out of transactions
entered into, or any state of facts existing, on or prior to said date, and
(iii) contingent liabilities in the nature of an endorsement, guarantee,
indemnity or warranty, and there is no condition, situation or circumstance
existing or which has existed that would reasonably be expected to result in
any
material liability of the Seller or each of the Subsidiaries, other than
liabilities and contingent liabilities incurred in the ordinary course of
business since the most recent SEC Report consistent with the Seller’s recent
customary business practice, none of which would reasonably be expected to
have
a Material Adverse Effect.
5
4.8 Taxes. The
Seller and each of the Subsidiaries have timely filed all federal, state, local
and foreign returns, estimates, information statements and reports (“Returns”)
relating to Taxes required to be filed by the Seller and each of the
Subsidiaries with any Tax authority. All such Returns are true,
correct and complete in all material respects. The Seller and each of
the Subsidiaries have paid all Taxes shown to be due on such
Returns. The Seller and each of the Subsidiaries are currently not
the beneficiary of any extensions of time within which to file any Returns.
No
claim has ever been made by an authority in a jurisdiction where the Seller
and
each of the Subsidiaries do not file tax returns that the Seller or each of
the
Subsidiaries is or may be subject to taxation by that
jurisdiction. There are no claims or encumbrances on any of the
Seller’s or the Subsidiaries assets that arose in connection with any failure
(or alleged failure) to pay any tax.
4.9 Contracts. Except
as would not have a material adverse effect on the Subsidiaries or their
obligations, (i) all contracts, agreements and commitments of the
Subsidiaries are valid, binding and in full force and effect, and
(ii) neither of the Subsidiaries nor, to the Seller’s knowledge, any other
party to any such contract, agreement, or commitment has materially breached
any
provision thereof or is in default thereunder. The sale of the Shares
by the Seller in accordance with this Agreement will not result in the
termination of any contract, agreement or commitment of the Subsidiaries, and
immediately after the Closing, each such contract, agreement or commitment
will
continue in full force and effect without the imposition or acceleration of
any
burdensome condition or other obligation on the Subsidiaries resulting from
the
sale of the Shares by the Seller. True and complete copies of all
contracts of the Subsidiaries will be delivered to Purchaser at
Closing.
4.12. Compliance
With the Law. The Seller and each of the Subsidiaries is not in
material violation of any applicable federal, state, local or foreign law,
regulation or order or any other, decree or requirement of any governmental,
regulatory or administrative agency or authority or court or other tribunal
(including, but not limited to, any law, regulation order or requirement
relating to securities, properties, business, products, manufacturing processes,
advertising, sales or employment practices, terms and conditions of employment,
occupational safety, health and welfare, conditions of occupied premises,
product safety and liability, civil rights, or environmental protection,
including, but not limited to, those related to waste management, air pollution
control, waste water treatment or noise abatement). The Subsidiaries
have not been and are not now charged with, or to the knowledge of the Seller
or
the Subsidiaries under investigation with respect to, any violation of any
applicable law, regulation, order or requirement relating to any of the
foregoing, nor, to the knowledge of Seller or the Subsidiaries, are there any
circumstances that would reasonably be expected to give rise to any such
violation. The Subsidiaries have filed all reports required to be
filed with any governmental, regulatory or administrative agency or
authority.
4.13. Litigation;
Pending Labor Disputes. Except as would not have a material
adverse effect on the Seller, there are no legal, administrative, arbitration
or
other proceedings or governmental investigations pending or, to the knowledge
of
Seller or the Subsidiaries, threatened, against the Seller or the Subsidiaries,
relating to the business of the Subsidiaries or their properties (including
leased property), or the transactions contemplated by this Agreement, nor is
there any basis known to the Seller or the Subsidiaries for any such
action. There are no judgments, decrees or orders of any court, or
any governmental department, commission, board, agency or instrumentality
binding upon Seller or the Subsidiaries relating to the business of each of
the
Subsidiaries the effect of which is to prohibit any business practice or the
acquisition of any property or the conduct of any business by the Subsidiaries
or which limit or control or otherwise adversely affect its method or manner
of
doing business.
6
4.14 Broker. Neither
the Seller nor the Subsidiaries have retained any broker in connection with
any
transaction contemplated by this Agreement. Purchaser and the Seller
shall not be obligated to pay any fee or commission associated with the
retention or engagement by the Seller of any broker in connection with any
transaction contemplated by this Agreement.
4.15. Disclosure. All
statements contained in any contract, schedule, closing certificate, opinion,
or
other closing document delivered by or on behalf of the Seller or each of the
Subsidiaries pursuant hereto or in connection with the transactions contemplated
hereby shall be deemed representations and warranties by the Seller and the
Seller herein. No statement, representation or warranty by the Seller
or each of the Subsidiaries in this Agreement or in any contract, schedule,
closing certificate, opinion, or other closing document furnished or to be
furnished to the Purchaser pursuant hereto or in connection with the
transactions contemplated hereby contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact required
to be
stated therein or necessary to make the statements contained therein not
misleading or necessary in order to provide a prospective purchaser of the
business the Subsidiaries with full and fair disclosure concerning the Seller,
and the Subsidiaries’ affairs.
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
5.1 Organization
and Good Standing.
The
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation.
5.2 Authority.
(a) The
execution and delivery of this Agreement and the consummation of the
transactions contemplated herein have been, or will prior to Closing be, duly
and validly approved and acknowledged by all necessary corporate action on
the
part of the Purchaser.
(b) The
execution of this Agreement and the delivery hereof to the Seller and the
purchase contemplated herein have been, or will be prior to Closing, duly
authorized by the Purchaser’s Board of Directors having full power and authority
to authorize such actions.
5.3 Conflicts;
Consents of Third Parties.
(a) The
execution and delivery of this Agreement and the consummation of the
transactions herein contemplated, and the compliance with the provisions and
terms of this Agreement, are not prohibited by the Articles of Incorporation
or
Bylaws of the Purchaser and will not violate, conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under,
any
court order, indenture, mortgage, loan agreement, or other agreement or
instrument to which the Purchaser is a party or by which it is
bound.
7
(b) No
consent, waiver, approval, order, permit or authorization of, or declaration
or
filing with, or notification to, any person or governmental body is required
on
the part of the Purchaser in connection with the execution and delivery of
this
Agreement or the Purchaser Documents or the compliance by Purchaser with any
of
the provisions hereof or thereof.
5.4 Litigation.
There
are
no Legal Proceedings pending or, to the best knowledge of the Purchaser,
threatened that are reasonably likely to prohibit or restrain the ability of
the
Purchaser to enter into this Agreement or consummate the transactions
contemplated hereby.
5.5 Broker.
The
Purchaser has not retained any broker in connection with any transaction
contemplated by this Agreement. Seller shall not be obligated to pay
any fee or commission associated with the retention or engagement by the
Purchaser of any broker in connection with any transaction contemplated by
this
Agreement.
ARTICLE
VI
COVENANTS
6.1 Access
to Information.
The
Seller and the Subsidiaries agree that, prior to the Closing Date, the Purchaser
shall be entitled, through its officers, employees and representatives
(including, without limitation, its legal advisors and accountants), to make
such investigation of the properties, businesses and operations of the Seller
and the Subsidiaries and such examination of the books, records and financial
condition of the Seller and the Subsidiaries as it reasonably requests and
to
make extracts and copies of such books and records. Any such
investigation and examination shall be conducted during regular business hours
and under reasonable circumstances, and the Seller shall cooperate, and shall
cause the Seller and the Subsidiaries to cooperate, fully therein. No
investigation by the Purchaser prior to or after the date of this Agreement
shall diminish or obviate any of the representations, warranties, covenants
or
agreements of the Seller contained in this Agreement or the Seller
Documents. In order that the Purchaser may have full opportunity to
make such physical, business, accounting and legal review, examination or
investigation as it may reasonably request of the affairs of the Seller and
the
Subsidiaries, the Seller shall cause the officers, employees, consultants,
agents, accountants, attorneys and other representatives of the Seller and
the
Subsidiaries to cooperate fully with such representatives in connection with
such review and examination.
8
6.2 Consents.
The
Seller and the each of the Subsidiaries shall use their best efforts, and the
Purchaser shall cooperate with the Seller and the Subsidiaries to obtain at
the
earliest practicable date all consents and approvals required to consummate
the
transactions contemplated by this Agreement, including, without limitation,
the
consents and approvals referred to in Section 4.4 hereof.
6.3 Preferred
Stock
Each
of
the Seller, Purchaser and Subsidiaries shall take all action necessary to secure
the cancellation of all or substantially all of the outstanding shares of Series
A Preferred Stock of Seller at the Closing.
6.4 Royalty
Participation Agreements
(a)
Upon
the Closing, IVMD (UK) shall assume the obligation to pay an aggregate of ten
(10%) percent of the royalty payments received from the sale of the prothrombin
blood clotting measuring device (the “PT Device”) on a pro rata basis to the PT
Note Holders set forth on Schedule 6.4(b) pursuant to certain Royalty
Participation Agreements (the “Royalty Agreements”) entered into among the
Seller and the PT Note Holders, up to a maximum of an aggregate of One Million
Three Hundred and Fifty Thousand ($1,350,000) Dollars (the “Maximum
Payment”).
(b)
The
parties agree that in the event that IVMD (UK) sells or otherwise disposes
of
its rights to receive royalty payments in respect of sales of the PT Device,
the
PT Note Holders shall receive an aggregate of ten (10%) percent, on a
pro rata basis, of any cash consideration received by IVMD (UK) in connection
with any such sale or disposition, less any royalty payments paid by IVMD
(UK) to the PT Note Holders pursuant to Section 6.4(a) above but in
no event shall any payment pursuant to this Section 6.4(b) exceed the Maximum
Payment.
(c)
If a
majority interest in either Purchaser or IVMD UK is sold within three (3) years
of the date of this Agreement for a purchase price as set forth below before
the
obligations to make payments to the PT Note Holders pursuant to Sections 6.4(a)
and 6.4(b) above are fully satisfied, then in such event all outstanding amounts
owed to the PT Note Holders shall be payable as set forth below, on a pro rata
basis, reduced by payments previously made to the PT Note Holders pursuant
to
this Section 6.4 of the Agreement:
|
Purchase
price of Purchaser of IVMD UK or MDI
|
Payment
to PT Note Holders
|
|
Less
than $2,000,000
|
Nil
|
|
$2,000,000
- $3,000,000
|
$200,000
|
|
$3,000,000
- $4,000,000
|
$300,000
|
|
$4,000,000
- $5,000,000
|
$450,000
|
|
$5,000,000
-$8,000,000
|
$600,000
|
|
$8,000,000
-$10,000,000
|
$800,000
|
|
$10,000,000
- $13,000,000
|
$900,000
|
|
In
excess of $13,000,000
|
$1,350,000
|
9
(d)
The parties hereby agree that IVMD
(UK) hereby assumes the obligation to make the payments set forth in this
Section 6.4 of this Agreement and shall not undertake or assume any other
obligation of Seller to the PT Note Holders pursuant to the Royalty
Agreements.
6.5 Security
Interest
The
Seller shall take all actions necessary to have any mortgages, liens and
security interests of in any and all of the property of the Subsidiaries
irrevocably released and terminated, and agrees to promptly obtain any and
all
mortgage releases in respect of any mortgages or deeds of trust encumbering
any
real property of each of the Subsidiaries and to obtain the consent of any
such
parties to the filing of Uniform Commercial Code ("UCC")
termination statements with respect to any UCC financing statements filed
against the Subsidiaries.
6.6 Other
Actions.
(a) Each
of the Seller, the Subsidiaries and the Purchaser shall use its best efforts
to
(i) take all actions necessary or appropriate to consummate the transactions
contemplated by this Agreement and (ii) cause the fulfillment at the earliest
practicable date of all of the conditions to their respective obligations to
consummate the transactions contemplated by this Agreement.
(b) The
Seller shall write off or otherwise agree to forego all amounts due to it from
each of the Subsidiaries on intercompany accounts or otherwise, in recognition
of the fact that (i) the Purchaser is buying the Subsidiaries which have
material third party net liabilities; and (ii) that the amounts shown as
receivable on intercompany accounts are reasonably regarded as irrecoverable
and
have therefore been fully provided against in the books of the
Seller.
6.7 Publicity.
None
of
the Seller, the Subsidiaries nor the Purchaser shall issue any press release
or
public announcement concerning this Agreement or the transactions contemplated
hereby without obtaining the prior written approval of the other party hereto,
which approval will not be unreasonably withheld or delayed, unless, in the
sole
judgment of the Purchaser or the Seller, disclosure is otherwise required by
applicable Law or by the applicable rules of any stock exchange on which the
Seller lists securities, provided that, to the extent required by applicable
law, the party intending to make such release shall use its best efforts
consistent with such applicable law to consult with the other party with respect
to the text thereof.
10
ARTICLE
VII
CONDITIONS
TO CLOSING
7.1 Conditions
Precedent to Obligations of Purchaser.
The
obligation of the Purchaser to consummate the transactions contemplated by
this
Agreement is subject to the fulfillment, on or prior to the Closing Date, of
each of the following conditions (any or all of which may be waived by the
Purchaser in whole or in part to the extent permitted by applicable
law):
(a) all
representations and warranties of the Seller and the Subsidiaries contained
herein shall be true and correct as of the date hereof;
(b) all
representations and warranties of the Seller and the Subsidiaries contained
herein qualified as to materiality shall be true and correct, and the
representations and warranties of the Seller and the Subsidiaries contained
herein not qualified as to materiality shall be true and correct in all material
respects, at and as of the Closing Date with the same effect as though those
representations and warranties had been made again at and as of that
time;
(c) the
Seller and the Subsidiaries shall have performed and complied in all material
respects with all obligations and covenants required by this Agreement to be
performed or complied with by them on or prior to the Closing
Date;
(d) the
Purchaser shall have been furnished with certificates (dated the Closing Date
and in form and substance reasonably satisfactory to the Purchaser) executed
by
the Seller and the Subsidiaries certifying as to the fulfillment of the
conditions specified in Sections 7.1(a), 7.1(b) and 7.1(c) hereof;
(e) Certificates
representing 100% of the Shares shall have been, or shall at the Closing be,
validly delivered and transferred to the Purchaser, free and clear of any and
all Liens;
(f) The
RPA
Note Holders shall have each entered into a Cancellation of Royalty
Participation Agreement and a Royalty Participation Agreement in compliance
with
Section 6.4 of this Agreement in the forms attached hereto as Exhibits A and
B,
respectively.
(g) there
shall not have been or occurred any Material Adverse Change;
(h) the
Seller and the Subsidiaries shall have obtained all consents and waivers
referred to in Section 4.4 hereof, in a form reasonably satisfactory to the
Purchaser, with respect to the transactions contemplated by this Agreement
and
the Seller Documents; and
(i) no
Legal
Proceedings shall have been instituted or threatened or claim or demand made
against the Seller and the Subsidiaries, or the Purchaser seeking to restrain
or
prohibit or to obtain substantial damages with respect to the consummation
of
the transactions contemplated hereby, and there shall not be in effect any
order
by a governmental body of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated
hereby.
11
7.2 Conditions
Precedent to Obligations of the Seller and the Subsidiaries.
The
obligations of the Seller and the Subsidiaries to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, prior to or
on
the Closing Date, of each of the following conditions (any or all of which may
be waived by the Seller and the Seller in whole or in part to the extent
permitted by applicable law):
(a) all
representations and warranties of the Purchaser contained herein shall be true
and correct as of the date hereof;
(b) all
representations and warranties of the Purchaser contained herein qualified
as to
materiality shall be true and correct, and all representations and warranties
of
the Purchaser contained herein not qualified as to materiality shall be true
and
correct in all material respects, at and as of the Closing Date with the same
effect as though those representations and warranties had been made again at
and
as of that date;
(c) the
Purchaser shall have performed and complied in all material respects with all
obligations and covenants required by this Agreement to be performed or complied
with by Purchaser on or prior to the Closing Date;
(d) the
Seller shall have been furnished with certificates (dated the Closing Date
and
in form and substance reasonably satisfactory to the Seller) executed by the
Chief Executive Officer of the Purchaser certifying as to the fulfillment of
the
conditions specified in Sections 7.2(a), 7.2(b) and 7.2(c); and
(e) The
RPA
Note Holders shall have each entered into a Cancellation of Royalty
Participation Agreement and a Royalty Participation Agreement in compliance
with
Section 6.4 of this Agreement in the forms attached hereto as Exhibits A and
B,
respectively.
(f) no
Legal
Proceedings shall have been instituted or threatened or claim or demand made
against the Seller, the Subsidiaries, or the Purchaser seeking to restrain
or
prohibit or to obtain substantial damages with respect to the consummation
of
the transactions contemplated hereby, and there shall not be in effect any
Order
by a Governmental Body of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated
hereby.
ARTICLE
VIII
DOCUMENTS
TO BE DELIVERED
8.1 Documents
to be Delivered by the Seller.
At
the
Closing, the Seller shall deliver, or cause to be delivered, to the Purchaser
the following:
(a) stock
certificates representing the Shares, duly endorsed in blank or accompanied
by
stock transfer powers and with all requisite stock transfer tax stamps
attached;
12
(b) copies
of
all consents and waivers referred to in Section 7.1(g) hereof;
(c) all
financial records of the Subsidiaries including the books and records of
original entry for accounting;
(d) the
entirety of the book containing all of the minutes of the Board of Directors
and
Shareholders for the life of the Subsidiaries but not less than the previous
two
years;
(e) copies
of
all regulatory filings which were required to be filed in the United Kingdom
for
the establishment and maintenance of a corporation in that state for at least
the last two years;
(f) any
and
all information about the business of the Subsidiaries including but not limited
to copies of the original tax returns filed that substantiate the amount of
previous losses;
(g) fully
executed signature cards placing the new officers on all of the Subsidiaries
bank accounts and brokerage accounts and removing the current signers,
and
(h) Delivery
of all corporate checking, savings and other account information including
checks, debit cards (if any), check books, deposit slips, bank and brokerage
account statements and agreements, and
(i) All
passwords necessary to access any and all Subsidiaries accounts, including
but
not limited, to Business Wire, corporate websites, online banking and brokerage
accounts, company software and hardware, where applicable, and
(j) such
other documents as the Purchaser shall reasonably request.
8.2 Documents
to be Delivered by the Purchaser.
At
the
Closing, the Purchaser shall deliver to the Seller the following:
(a) the
Purchase Price;
(b) the
certificates referred to in Section 7.2(d) hereof;
(c) such
other documents as the Seller shall reasonably request.
ARTICLE
IX
INDEMNIFICATION
9.1 Indemnification.
(a) Subject
to Section 9.2 hereof, the Seller hereby agrees to indemnify and hold the
Purchaser, the Subsidiaries, and their respective directors, officers,
employees, Affiliates, agents, successors and assigns (collectively, the
"Purchaser Indemnified Parties") harmless from and against:
13
(i) any
an
all liabilities of the Subsidiaries of every kind, nature, and description,
absolute or contingent, existing as against the Subsidiaries prior to and
including the Closing Date or thereafter coming into being or arising by reason
of any state of facts existing, or any transaction entered into, on or prior
to
the Closing Date;
(ii) subject
to Section 10.3, any and all losses, liabilities, obligations, damages, costs
and expenses based upon, attributable to or resulting from the failure of any
representation or warranty of the Seller set forth in Section 4 hereof, or
any
representation or warranty contained in any certificate delivered by or on
behalf of the Seller pursuant to this Agreement, to be true and correct in
all
respects as of the date made;
(iii) any
and
all losses, liabilities, obligations, damages, costs and expenses based upon,
attributable to or resulting from the breach of any covenant or other agreement
on the part of the Seller under this Agreement;
(iv) any
and
all notices, actions, suits, proceedings, claims, demands, assessments,
judgments, costs, penalties and expenses, including attorneys' and other
professionals' fees and disbursements (collectively, "Expenses") incident to
any
and all losses, liabilities, obligations, damages, costs and expenses with
respect to which indemnification is provided hereunder (collectively,
"Losses").
(b) Subject
to Section 9.2, Purchaser hereby agrees to indemnify and hold the Seller, its
affiliates, agents, successors and assigns (collectively, the "Seller
Indemnified Parties") harmless from and against:
(i) any
and
all Losses based upon, attributable to or resulting from the failure of any
representation or warranty of the Purchaser set forth in Section 5 hereof,
or
any representation or warranty contained in any certificate delivered by or
on
behalf of the Purchaser pursuant to this Agreement, to be true and correct
as of
the date made;
(ii) any
and
all Losses based upon, attributable to or resulting from the breach of any
covenant or other agreement on the part of the Purchaser under this Agreement
or
arising from the ownership or operation of the Subsidiaries from and after
the
Closing Date; and
(iii) any
and
all Expenses incident to the foregoing.
9.2 Limitations
on Indemnification for Breaches of Representations and Warranties.
(a) An
indemnifying party shall not have any liability under Section 9.1(a)(i), Section
9.1(a)(ii) or Section 9.1(b)(i) hereof unless the aggregate amount of Losses
and
Expenses to the indemnified parties finally determined to arise thereunder
based
upon, attributable to or resulting from the failure of any representation or
warranty to be true and correct, other than the representations and warranties
set forth in Sections 4.3 and 4.11 hereof, exceeds $10,000 (the “Basket”) and,
in such event, the indemnifying party shall be required to pay the entire amount
of such Losses and Expenses in excess of $10,000 (the
“Deductible”).
14
9.3 Indemnification
Procedures.
(a) In
the
event that any Legal Proceedings shall be instituted or that any claim or demand
("Claim") shall be asserted by any Person in respect of which payment may be
sought under Section 9.1 hereof (regardless of the Basket or the Deductible
referred to above), the indemnified party shall reasonably and promptly cause
written notice of the assertion of any Claim of which it has knowledge which
is
covered by this indemnity to be forwarded to the indemnifying
party. The indemnifying party shall have the right, at its sole
option and expense, to be represented by counsel of its choice, which must
be
reasonably satisfactory to the indemnified party, and to defend against,
negotiate, settle or otherwise deal with any Claim which relates to any Losses
indemnified against hereunder. If the indemnifying party elects to
defend against, negotiate, settle or otherwise deal with any Claim which relates
to any Losses indemnified against hereunder, it shall within five (5) days
(or
sooner, if the nature of the Claim so requires) notify the indemnified party
of
its intent to do so. If the indemnifying party elects not to defend
against, negotiate, settle or otherwise deal with any Claim which relates to
any
Losses indemnified against hereunder, fails to notify the indemnified party
of
its election as herein provided or contests its obligation to indemnify the
indemnified party for such Losses under this Agreement, the indemnified party
may defend against, negotiate, settle or otherwise deal with such
Claim. If the indemnified party defends any Claim, then the
indemnifying party shall reimburse the indemnified party for the Expenses of
defending such Claim upon submission of periodic bills. If the
indemnifying party shall assume the defense of any Claim, the indemnified party
may participate, at his or its own expense, in the defense of such Claim;
provided, however, that such indemnified party shall be entitled to participate
in any such defense with separate counsel at the expense of the indemnifying
party if (i) so requested by the indemnifying party to participate or (ii)
in
the reasonable opinion of counsel to the indemnified party, a conflict or
potential conflict exists between the indemnified party and the indemnifying
party that would make such separate representation advisable; and provided,
further, that the indemnifying party shall not be required to pay for more
than
one such counsel for all indemnified parties in connection with any
Claim. The parties hereto agree to cooperate fully with each other in
connection with the defense, negotiation or settlement of any such
Claim.
(b) After
any
final judgment or award shall have been rendered by a court, arbitration board
or administrative agency of competent jurisdiction and the expiration of the
time in which to appeal therefrom, or a settlement shall have been consummated,
or the indemnified party and the indemnifying party shall have arrived at a
mutually binding agreement with respect to a Claim hereunder, the indemnified
party shall forward to the indemnifying party notice of any sums due and owing
by the indemnifying party pursuant to this Agreement with respect to such matter
and the indemnifying party shall be required to pay all of the sums so due
and
owing to the indemnified party by wire transfer of immediately available funds
within 10 business days after the date of such notice.
15
(c) The
failure of the indemnified party to give reasonably prompt notice of any Claim
shall not release, waive or otherwise affect the indemnifying party's
obligations with respect thereto except to the extent that the indemnifying
party can demonstrate actual loss and prejudice as a result of such
failure.
ARTICLE
X
MISCELLANEOUS
10.1 Payment
of Sales, Use or Similar Taxes.
All
sales, use, transfer, intangible, recordation, documentary stamp or similar
Taxes or charges, of any nature whatsoever, applicable to, or resulting from,
the transactions contemplated by this Agreement shall be borne by the
Seller.
10.2 Survival
of Representations and Warranties.
The
parties hereto hereby agree that the representations and warranties contained
in
this Agreement or in any certificate, document or instrument delivered in
connection herewith, shall survive the execution and delivery of this Agreement,
and the Closing hereunder, regardless of any investigation made by the parties
hereto; provided, however, that any claims or actions with respect thereto
(other than claims for indemnifications with respect to the representation
and
warranties contained in Sections 4.3 and 4.11, which shall survive for periods
coterminous with any applicable statutes of limitation) shall terminate unless
within twelve (12) months after the Closing Date written notice of such claims
is given to the Sellers or such actions are commenced.
10.3 Expenses.
Except
as
otherwise provided in this Agreement, the Seller, Subsidiaries and the Purchaser
shall each bear its own expenses incurred in connection with the negotiation
and
execution of this Agreement and each other agreement, document and instrument
contemplated by this Agreement and the consummation of the transactions
contemplated hereby and thereby.
10.4 Specific
Performance.
The
Seller and the Subsidiaries acknowledge and agree that the breach of this
Agreement would cause irreparable damage to the Purchaser and that the Purchaser
will not have an adequate remedy at law. Therefore, the obligations
of the Seller and the Subsidiaries under this Agreement, including, without
limitation, the Seller’s obligation to sell the Shares to the Purchaser, shall
be enforceable by a decree of specific performance issued by any court of
competent jurisdiction, and appropriate injunctive relief may be applied for
and
granted in connection therewith. Such remedies shall, however, be
cumulative and not exclusive and shall be in addition to any other remedies
which any party may have under this Agreement or otherwise.
16
10.5 Further
Assurances.
The
Seller and the Purchaser each agrees to execute and deliver such other documents
or agreements and to take such other action as may be reasonably necessary
or
desirable for the implementation of this Agreement and the consummation of
the
transactions contemplated hereby.
10.6 Submission
to Jurisdiction; Consent to Service of Process.
(a) The
parties hereto hereby irrevocably submit to the non-exclusive jurisdiction
of
any federal or state court located within the state of Colorado over any dispute
arising out of or relating to this Agreement or any of the transactions
contemplated hereby and each party hereby irrevocably agrees that all claims
in
respect of such dispute or any suit, action proceeding related thereto may
be
heard and determined in such courts. The parties hereby irrevocably
waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of venue of any such dispute
brought in such court or any defense of inconvenient forum for the maintenance
of such dispute. Each of the parties hereto agrees that a judgment in
any such dispute may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.
(b) Each
of
the parties hereto hereby consents to process being served by any party to
this
Agreement in any suit, action or proceeding by the mailing of a copy thereof
in
accordance with the provisions of Section 10.10.
10.7 Entire
Agreement; Amendments and Waivers.
This
Agreement (including the schedules
and exhibits hereto) represents the entire understanding and agreement between
the parties hereto with respect to the subject matter hereof and can be amended,
supplemented or changed, and any provision hereof can be waived, only by written
instrument making specific reference to this Agreement signed by the party
against whom enforcement of any such amendment, supplement, modification or
waiver is sought. No action taken pursuant to this Agreement,
including without limitation, any investigation by or on behalf of any party,
shall be deemed to constitute a waiver by the party taking such action of
compliance with any representation, warranty, covenant or agreement contained
herein. The waiver by any party hereto of a breach of any provision
of this Agreement shall not operate or be construed as a further or continuing
waiver of such breach or as a waiver of any other or subsequent
breach. No failure on the part of any party to exercise, and no delay
in exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of such right, power or remedy
by such party preclude any other or further exercise thereof or the exercise
of
any other right, power or remedy. All remedies hereunder are
cumulative and are not exclusive of any other remedies provided by
law.
10.8 Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the state of Colorado.
17
10.9 Headings.
The
section headings of this Agreement are for reference purposes only and are
to be
given no effect in the construction or interpretation of this
Agreement.
10.10 Notices.
All
notices and other communications under this Agreement shall be in writing and
shall be deemed given when delivered personally or mailed by certified mail,
return receipt requested, to the parties (and shall also be transmitted by
facsimile to the Persons receiving copies thereof) at the following addresses
(or to such other address as a party may have specified by notice given to
the
other party pursuant to this provision):
|
(a)
|
Purchaser:
|
Medical
Diagnostics Innovations, Inc.
0xx
Xxxxx, 00 Xxxxx
Xxxxxx Xxxxxx
Xxxxxx
X0X 0XX
Xxxxxx
Xxxxxxx
Copy
to:
|
(b)
|
IVMD
(UK)
|
Xxxx
0,
Xxxxxx Xxxxxxxx Xxxx
Xxxxxx
Xxxxxxxxx
Xxxxxxxxx,
Warrington
WA5
5YT,
United Kingdom
Copy
to:
|
(c)
|
Jopejo
Limited
|
Xxxx
0,
Xxxxxx Xxxxxxxx Xxxx
Xxxxxx
Xxxxxxxxx
Xxxxxxxxx,
Xxxxxxxxxx
XX0
0XX,
Xxxxxx Xxxxxxx
Copy
to:
18
|
(d)
|
Seller:
|
Xxx
Xxxxx
Xxxxx
Xxxxxxxxx
Xxxxxxxx Xxxx Xxxxx
Xxxxxxxxx,
Xxxxxxxx XX0 0XX
Copy
to:
Xxxxxxx
Xxxxxxxx, Esq.
Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
00
Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Phone: (000)
000-0000
Facsimile:
(000) 000-0000
10.11 Severability.
If
any
provision of this Agreement is invalid or unenforceable, the balance of this
Agreement shall remain in effect.
10.12 Binding
Effect; Assignment.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns. Nothing in this
Agreement shall create or be deemed to create any third party beneficiary rights
in any person or entity not a party to this Agreement except as provided
below. No assignment of this Agreement or of any rights or
obligations hereunder may be made by either the Seller or the Purchaser (by
operation of law or otherwise) without the prior written consent of the other
parties hereto and any attempted assignment without the required consents shall
be void; provided, however, that the Purchaser may assign this Agreement and
any
or all rights or obligations hereunder (including, without limitation, the
Purchaser's rights to purchase the Shares and the Purchaser's rights to seek
indemnification hereunder) to any Affiliate of the Purchaser; provided, further,
that notwithstanding any such assignment or delegation, the Purchaser shall
continue to be bound by all the terms of this Agreement. Upon any
such permitted assignment, the references in this Agreement to the Purchaser
shall also apply to any such assignee unless the context otherwise
requires.
[Signature
page follows]
19
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.
By: /s/
Xxxxxx Thorp_______________
Name:
Xxxxxx Xxxxx
Title:
Chief Financial
Officer
IVMD
(UK) Limited
By:
/s/ Xxxxxx Thorp_______________
Name:
Xxxxxx Xxxxx
Title:
Director
Jopejo
Limited
By:
/s/ Xxxxxx Thorp________________
Name:
Xxxxxx Xxxxx
Title:
Director
Medical
Diagnostic Innovations Ltd.
By:
/s/ Xxxxxx Galvin_________________
Name:
Xxxxxx Xxxxxx
Title:
Director
20
